USMarketView

February 14, 2008

On Valentine’s Day the DJIA and the S&P500 gave back yesterday’s gains, and while the NASDAQ also turned down, its loss did not negate Tuesday’s entire advance.

In the past, when the DJIA fell after three straight up days, its median loss was just -.61 percent, less than half of today’s -1.40 percent; and the record, since January 2000, shows just 45 such closes, of which only ten were steeper than minus one percent.

It’s the same for the S&P500, with 62 losses following three successive up sessions, with just nine in excess of minus one percent and a median loss of -.42 percent.

Turning to history to conjecture what might occur in the future, the DJIA has 15 further declines but 30 up ticks – following a loss after three straight gains. Similarly, the S&P500 shows 24 losses compared to 38 advances.

While the NASDAQ displayed a slightly different pattern, its performance since January 2000 reveals only eight further declines compared to 14 advances for the next session.

DJIA -1.40 percent
NASDAQ -1.74 percent
S&P500 -1.34 percent

February 13, 2008

The NASDAQ scored its largest surge of the year, gaining 2.32 percent. Not only is this largest gain since last November, but the NASDAQ had only four days in all of 2007 with a stronger close.

The DJIA and the S&P500 advances represent similar strength, achieving the fourth largest gain in the 29 trading days of 2008. Moreover, these indices finally managed to put together three consecutive up ticks, the first such run since last December.

To put these results in perspective, both the DJIA and the NASDAQ increases are in the 90^th percentile: only 10 percent of their closes since January 2000 exceed today’s performance.

Two weeks ago, when these indices were hit by substantial losses, it was on a Tuesday; and while substantial reverses are associated with the second trading day of the week, it should be remembered that today’s strength occurred on a Tuesday.

DJIA 1.45 percent
NASDAQ 2.32 percent
S&P500 1.36 percent

February 12, 2008

Unlike yesterday, when all three indices moved higher, the NASDAQ actually dropped -less than 1/100^th of a percent- whereas the DJIA increased 1.09 percent and the S&P500 gained .73 percent.

Had the NASDAQ closed higher today, it would have been the first time since last December for this index to post four straight plus sessions. However, this failure is in line with the record: by a thin margin, there have been more down days -80- than the 64 up days following three straight increases.

In the past, after two straight advances, both the DJIA and the S&P500 had more declines, on the next day, than further increases. The DJIA had more than twice as many days down than up: 152 to 74. History for the S&P500 shows an even smaller up ratio, 151 declines to just 33 increases.

DJIA 1.09 percent
NASDAQ .00 percent
S&P500 .73 percent

February 11, 2008

Although moderate, all three indices posted gains, with the NASDAQ managing to put together three up ticks in as many days. This is its first triple day plus run ince last December 20, putting it substantially behind last year’s pace of 21 such closes.

The DJIA and the S&P500 have yet to post such a run in 2008; although they managed to have 19 and 16, respectively, in 2007.

Today’s increases are in line with the record for this sequence of closes, with the NASDAQ gain of .66 percent moderately larger than the median uptick of .51 percent in the 144 such three day runs since January 2000.

In the past, these were followed by 64 positive days, generating a string of four up days, with a median gain of .69 percent. On the other hand, there were 80 next day declines, with a median loss of -.74 percent.

DJIA .48 percent
NASDAQ .66 percent
S&P500 .59 percent

February 8, 2008

Losses for the week were just about equivalent to the strong gains of the week before, with the NASDAQ decrease deeper by .70 percentage points, the DJIA decline offsetting the increase, and the S&P500 fall smaller by .27 points.

To put these changes in perspective, note that, since January 2000, the S&P and the DJIA weekly losses exceeded this week’s only ten times; that two came earlier this year, on January 4 and January 18; and that previous losses this deep occurred in February 2007 for the S&P500 and in March 2003 for the DJIA. While the NASDAQ record shows 47 weekly decreases this large, the last two were this January 4 and on November 9, 2007.

On Friday itself, the NASDAQ index increased, while the other two indices declined. Such divergence is not common, taking place only 122 other times since January, 2000.

DJIA -.53 percent
NASDAQ .52 percent
S&P500 -.42 percent

Posted February 10, 9:00 PM

February 7, 2008

The gains were modest, but the final bell found all three indices in positive territory, closing higher than on Wednesday.

After three successive losses, this finish is in some conformance with previous patterns since January 2000.

The results for the succeeding day -tomorrow when we consider history back into the late 1900’s- show a greater number of up days than declines. Specifically, 153 gains compared to 105 losses for the NASDAQ; while the S&P500 and DJIA ratios of gains to losses are 1.37 and 1.24, respectively.

However, the record is less robust since January 2000: the S&P500 and the NASDAQ still have positive ratios, but they decline to 1.10, whereas the DJIA turns in the opposite direction, realizing more declines than up closes.

DJIA .38 percent
NASDAQ .63 percent
S&P500 .79 percent

February 6, 2008

While today’s decline is the third negative close in as many days, the DJIA and S&P500 losses were smaller than in the previous two sessions. Only the NASDAQ experienced a deeper drop on Wednesday.

These averages have realized such three days straight declines some 115 times since January 2000. Today’s drops are quite close to, and even somewhat smaller than, the median loss on the third day of that string.

The DJIA closed off -.53 percent today, while its median is -.63 percent and the S&P500’s drop of -.76 percent is also smaller than its median of -.78 percent. Even the NASDAQ’s more substantial -1.33 percent loss is below its -1.38 percent median on the third successive down day.

In the past, a fourth consecutive loss occurred fewer times than a positive turn around after three losses for both the DJIA and S&P500. The ratio is 63 gains to 49 losses for the former index and 71 gains to 44 losses for the latter. The NASDAQ, however, has a history of nearly equal number of up and down days. That ratio is 59 losses to 58 gains.

There have been more negative days than positive closes in these 24 trading days of 2008. The NASDAQ has 15 down days, the S&P500 has 14 and the DJIA fell on 13 days. Of these, the NASDAQ and the S&P500 have ten losses exceeding two percent while the DJIA score is 9 days.
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DJIA -.53 percent
NASDAQ -1.33 percent
S&P500 -.76 percent

February 5, 2008

Today’s S&P500 loss of -3.2 percent and the DJIA slump of -2.93 percent are the steepest since February 27, 2007. While the NASDAQ’s -3.08 percent plunge’s more recent forerunner is this past January 4, its next severe drop shares the February 2007 date.

Moreover, while the NASDAQ experienced 91 days (since January 2000) with declines worse than today, the DJIA had only 16 and the S&P500 comes in best with only 13 such sharp setbacks.

Looking at what happened on the day after, the DJIA scores best, with 11 recoveries and just 5 further declines; the NASDAQ has the worst record, with its 48 days of additional erosion outnumbering its 43 rebound days. The S&P500 comes in with 5 more loss sessions but has 8 days of springing back to higher closes.

The majority of these sharp devaluations resulted from, or caused, the sheer market drop between 2000 and 2002. While that may imply worse days ahead, those huge declines ceased once prices turned up and climbed to higher territory.

Tuesdays have a bad reputation in the market; while the reason for losses on Tuesdays is unknown, it is clear that large corrections do occur on Tuesdays. Today is Tuesday, February 27, 2007 was a Tuesday, and 4 of the 13 S&P500 deeper than 3.2 percent drops took place on Tuesday. So did five of the 16 DJIA and 23 of the 95 NASDAQ plunges. Well, tomorrow is Wednesday!

DJIA -2.93 percent
NASDAQ -3.08 percent
S&P500 -3.20 percent

February 4, 2008

All three indices declined today, after moving higher last Friday and Thursday. This marks the fourth time this year that the averages posted two gains in a row, but failed to manage a third, successive positive day.

In fact the last time we had three straight positive closes was toward the end of December 2007, some 27 trading days ago, for the DJIA and S&P500, and 29 days in the past for the NASDAQ.

Yet in the 250 trading days of 2007, the NASDAQ index turned in a third positive day 21 times, or at the rate of one every 12 days. The DJIA, with 19 of these had a positive third day every 13 days, and the S&P500 had an average of once every 16 days.

Today was also the third day after the latest Fed Funds cut, another consideration in evaluating today’s market drop. Increases are the usual response, even this late after the announcement date. Indeed, over the last 21 Fed cuts, prices increased 13 times, and decreased only 8 times, for the DJIA and the S&P500; the NASDAQ had a smaller share of positive changes on the third day after a Fed Fund cut, only 11 compared to 10 negative days.

DJIA -.85 percent
NASDAQ -1.24 percent
S&P500 -1.05 percent

February 1, 2008

Market performance this past week crossed two important marks:

1. Posting the first strong, positive week since

December 21, some five weeks ago; and

2. Achieving increases of 4.87 percent for the S&P500 and 4.39 percent for the DJIA, weekly gains not equaled since March 2003. The NASDAQ’s 3.75 percent uptick for the week, while smaller, nevertheless is the largest since August 2004.

To put these weekly changes in perspective, note that, since January 2000, the S&P surpassed this rate in only ten weeks, the DJIA bettered its gain in only 11 weeks, while the NASDAQ exceeded it more modest increase 49 times.

As for Wednesday’s Fed’s rate cut, while the index prices turned down on that day, they moved higher on Thursday, one day after the announcement.

But as noted in Wednesday’s analysis, they were able to move ahead the next day, consistent with the pattern since last October, when the market moved higher the day after the announcement in what is now four of the last five Fed Fund cuts. And that one exception took place last October.

DJIA .73 percent
NASDAQ .98 percent
S&P500 1.22 percent

Posted February 3, 2:00 PM